Longyuan’s Profit Growth Slows as Power Demand Softens

(Corrects to say 59 megawatts of solar farms in last
paragraph of story originally published March 25.)

March 25 (Bloomberg) -- China Longyuan Power Group Corp.,
the nation’s biggest wind-farm developer, reported a slowdown in
earnings growth as domestic electricity demand rose at a slower
pace.

Net income rose 0.6 percent to 2.59 billion yuan ($417
million) in the 12 months ended Dec. 31 compared with a 29
percent surge a year ago when profit was 2.58 billion yuan,
Longyuan said in a statement to the Hong Kong stock exchange.
The mean estimate of 22 analysts compiled by Bloomberg was for
profit of 2.8 billion yuan.

“Due to the general slowdown in economic growth, the
growth of electricity consumption in China was moderate,”
Longyuan said in the statement. “The problem of delivery and
grid curtailment of wind power has not yet been materially
improved in 2012.”

Installations of wind turbines in China fell 18 percent to
15.9 gigawatts last year from 2011, according to data compiled
by Bloomberg New Energy Finance. Intensified grid congestion has
driven down wind developers’ profits.

China Datang Corp. Renewable Power Co. and Huaneng
Renewables Corp., wind- and clean-energy developers, last week
reported a decline in earnings, citing grid bottlenecks as one
of the reasons.

To alleviate grid burdens, China implemented stricter
approval processes for new onshore projects. Longyuan said today
that it would be “difficult” to solve the problems in the
short term.

The National Energy Administration excluded Jilin, Inner
Mongolia and Heilongjiang provinces when issuing new permits for
wind farms on March 19 because of grid overload. The NEA said it
will work to improve connections of wind power to grids.

Longyuan added 1.6 gigawatts of wind farms last year,
bringing its total installed capacity to 12.7 gigawatts. The
company also built 59 megawatts of solar power projects in 2012.